Greenchef Appliances Limited

As per financial performance, Greenchef Appliances Limited has posted total income/net profits of Rs 238.07 Cr / Rs 1.17 Cr (FY20), Rs 239.29 Cr / Rs 2.57 Cr (FY21), Rs 337.05 Cr / Rs 0.82 Cr (FY22) and Rs 256.33 Cr / Rs 10.21 Cr (9M FY23), So company has shown average results, but the sudden rise in net profit just before IPO is very surprising. Company has posted an average EPS of Rs 0.92/- and average RoNW of 2.77% for last three fiscals. Issue is priced at a P/BV of 2.46 as per NAV of Rs 35.43/- as on 31.12.22. As per FY22 earnings on fully diluted equity post issue, asking price is at P/E of around 246.64 and as per annualised FY23 earnings P/E is 14.86. As per RHP, comparison between listed peers are shown in above table. On BRLM's front, Hem Securities Limited is associated with this SME IPO and handled 23 SME IPOs in last 3 years. From last 10 SME IPOs, all opened above issue price or at par and remaining below issue price on the listing day. As of now from last 10 IPOs, all are trading above issue price. ( As on 22.06.23 ) As per financials, Greenchef Appliances Limited has shown average results, RoNW is 1.48% and P/E is respectively 246.64 and 14.86 as per FY22 and annualised FY23 earnings, which looks aggressively priced. Also sudden rise in net profit in IPO year raises concerns. Company is in business of manufacturing and marketing kitchen appliances, which is highly competitive and fragmented with many known and local brands. This sector is expected to do well as we see fall in interest rates. Performance of BRLM is good. So we are giving NEUTRAL rating to this SME IPO, readers must consult a qualified financial advisor prior to making any actual investment decisions.

• 1 Sukhlal Jain
• 2 Praveen Kumar Sukhlal Jain
• 3 Vikas Kumar Sukhlal Jain
• 4 Hitesh Kumar Jain
• 5 Vikas Kumar Sukhlal Jain HUF